Health plans urged to improve member experience, address disparities

By Alan Goforth - Health plans have a pressing need to address barriers to higher member satisfaction, the Health Plan Member Experience in 2024 report from Press Ganey found. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. Member Experience and Key Drivers: Health plans can enhance member satisfaction by focusing on critical drivers such as access, safety, privacy, and care coordination. Star Ratings and member experience are closely linked, with patient safety and privacy emerging as essential factors alongside traditional customer service and benefit design.

2. Differentiation through Specialist Engagement: While access to primary care remains essential, specialist engagement and care coordination between primary care providers and specialists are key differentiators for high-performing health plans. Members with coordinated specialist care tend to provide significantly higher Star Ratings.

3. Tailored Improvement Strategies and Addressing Disparities: Improvement strategies should be customized for different health plan types, as Net Promoter Scores vary significantly between Medicare, Medicaid, and commercial plans. Additionally, disparities in care, particularly for historically disadvantaged populations, need to be addressed to ensure equitable treatment and improved satisfaction across all demographics.

FTC: Big 3 PBMs generated $7.3B from specialty generic drug markups

By Noah Tong - CVS Caremark, Express Scripts and OptumRx dramatically mark up specialty generic drugs to affiliated pharmacies, the Federal Trade Commission (FTC) uncovered in its second interim staff report released Jan. 14. Read Full Article…

HVBA Article Summary

1. Excess Revenue and Price Markups: The FTC report revealed that pharmacy benefit managers' (PBMs) affiliated pharmacies generated $7.3 billion in excess revenue from 2017 to 2022, with significant markups on specialty generic drugs compared to the National Average Drug Acquisition Cost (NADAC). Markups included a 7,700% increase for Tadalafil and over 1,000% for oncology drugs, highlighting potentially widespread overcharging practices.

2. Vertical Integration and Corporate Profits: The report emphasized the influence of vertical integration, with the top three PBMs (CVS, Cigna, UnitedHealthcare) controlling both insurance and pharmacy services. PBM-affiliated pharmacy revenue grew at an annual rate of 42% between 2017 and 2021, with specialty generic drugs contributing 12% of operating income for the parent corporations' business segments.

3. Regulatory and Legal Responses: The FTC has pursued legal action against PBMs for anticompetitive practices, including artificially inflating insulin prices. PBMs countersued, challenging the FTC's findings and data collection processes. Lawmakers from both parties and President-elect Donald Trump have expressed interest in PBM reform, though it was excluded from a recent spending bill, indicating ongoing policy debate.

Are ICHRAs the ‘future of health care coverage’? Giant insurer Centene thinks so

By Allison Bell - Can individual coverage health reimbursement arrangements really become a significant force in the U.S. health benefits market? A big health insurer is voting "yes" with its organizational chart. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. Centene's Strategic Move in ICHRA Leadership: Centene has appointed Alan Silver as President of ICHRA at Ambetter Health, making it the first major insurer to have a dedicated executive for Individual Coverage Health Reimbursement Arrangement (ICHRA) operations, signaling a strategic focus on expanding in this market.

2. Potential and Challenges of ICHRAs: ICHRAs are emerging as a tool for employers to offer cash payments for employees to purchase individual health insurance. However, growth has been hindered by the limited availability of policies aimed at employers seeking comprehensive benefits rather than low-cost, basic coverage.

3. Centene's Broader Diversification Efforts: Historically focused on government-sponsored health plans, Centene is expanding its focus to the commercial insurance market, particularly as changes in Medicare policies encourage insurers to seek new revenue streams. The hiring of Silver aligns with this shift as Centene aims to grow its presence in the ICHRA space.

Shopping for health care isn’t like picking out produce

By Opinion, The Washington Post - Regarding David Goldhill’s Jan. 3 op-ed, “Why is health care so expensive in America? Insurance.” Goldhill’s critique of the U.S. health insurance system is right on target. We pay much more than other developed countries, yet we don’t live nearly as long. He’s right that our administrative costs are too high. Those should be reduced. Read Full Article…

HVBA Article Summary

1. Patients Lack Expertise for Medical Decision-Making: Goldhill's advocacy for consumer-driven medical choices is flawed because patients lack the ability to diagnose themselves, assess treatment quality, or effectively compare care providers. Trusting personal impressions of a doctor's demeanor is not equivalent to making informed healthcare decisions.

2. Scientific Advancements Are Not Tied to Insurance Models: Goldhill's claim that adopting a system similar to Britain's would hinder scientific advancements is misleading. Scientific progress in the U.S. is driven largely by NIH funding, separate from insurance models, while Britain's healthcare system is equally advanced despite spending a lower percentage of its GDP on healthcare.

3. Healthcare Should Not Be Treated as a Commodity: Health economist Kenneth Arrow demonstrated that healthcare is not a standard commodity because patients cannot access complete information to assess care quality or pricing. In a competitive market, wealthier individuals would dominate access to care, while the poorer could be excluded, making healthcare inequitable.

The Medicare Price Negotiation Meeting Minutes: Some Nuggets

By William Sarraille - I make two points in Nyah’s (typically) insightful article that focuses, not insubstantially, on the Centers for Medicare and Medicaid Services’ decision to include “meeting minutes” of the negotiation discussions with each manufacturer as part of its “justification” of Inflation Reduction Act “negotiated” prices. Read Full Article…

HVBA Article Summary

1. Lack of Transparency in Pricing Justifications: The CMS meeting minutes reveal vague and generalized language, such as applying factors "holistically" and considering the "totality of the circumstances." This approach lacks clarity on the weight and importance of each factor, making it difficult to understand how prices were determined and potentially insulating CMS from legal scrutiny.

2. Legal Influence and Defensive Language: The meeting records highlight how both CMS and drug manufacturers were heavily influenced by legal concerns, with "lawyered up" language shaping the documentation. Repeated use of terms like "agreement" seems designed to defend against litigation claims that the prices were imposed rather than genuinely negotiated.

3. Inconsistent Use of Therapeutic Alternatives (TAs): While CMS's selection of therapeutic alternatives sometimes explains pricing disparities, the approach was inconsistent, with some drugs facing significant discounts despite limited alternatives. The documentation also risks encouraging insurers and pharmacy benefit managers to switch patients to higher rebate drugs, as CMS's cautionary statements on this issue were weak and unconvincing.

Eli Lilly's Obesity Drug Gets Medicare Coverage for Sleep Apnea

By Reuters - Eli Lilly's obesity drug Zepbound can now be covered by government-backed Medicare insurance plans for use in sleep apnea, broadening access to the blockbuster weight-loss treatment. Read Full Article…

HVBA Article Summary

1. Medicare Coverage Expansion: The Centers for Medicare & Medicaid Services (CMS) clarified that Zepbound, a GLP-1 drug, could be covered under Medicare due to its FDA approval for sleep apnea, as obesity drugs are only covered when they have a secondary approved use. Insurers can still choose not to cover it despite this guidance.

2. Commercial Coverage and Cost: Commercial insurers and employers have hesitated to cover Zepbound due to its high cost of over $1,000 per month, despite its potential benefits for treating sleep apnea and other conditions.

3. Broader Market Trends and Future Policies: Pharmaceutical companies like Lilly and Novo Nordisk are racing to expand the approved uses of their blockbuster obesity drugs, with Medicare already covering Wegovy for reducing cardiovascular risks. The Biden administration proposed expanded obesity drug coverage starting in 2026, pending support from the next administration.

Retail pharmacies are struggling, but the power of PBMs remains strong

By Maia Anderson and Cassie McGrath - While retail pharmacies have been struggling lately, CVS may have an ace up its sleeve: its pharmacy benefit manager (PBM) Caremark. Read Full Article… 

HVBA Article Summary

1. Dominance and Influence of PBMs: The three largest PBMs—CVS's Caremark, Cigna's Express Scripts, and UnitedHealth Group's Optum Rx—control approximately 80% of U.S. prescription management, impacting around 270 million people. Their vertical integration within major healthcare companies provides them with significant influence over drug pricing and supply chain contracts, while their pricing structures remain opaque.

2. Financial Power and Profitability: PBMs generate substantial revenue, with the top three collectively exceeding $400 billion in 2022. For example, CVS reported $44.1 billion in Q3 2023 revenue from its health services segment, which includes Caremark, despite financial challenges in its insurance arm, Aetna. This profitability stems partly from their control over reimbursement rates and drug manufacturer rebates, which lack transparency.

3. Regulatory Scrutiny and Challenges: PBMs have come under increased federal scrutiny, with the FTC investigating and suing them for potentially inflating drug costs. Attempts by other companies, like Rite Aid’s acquisition of Elixir, have struggled due to PBM market complexities and regulatory pressures, highlighting the risks of entering the PBM sector at this time.